International Tea Day: Pakistan is the World's Largest Tea Importer

[Riaz Haq]

Pakistan does not produce tea but it is the most popular beverage among Pakistanis.  The country is ranked as its largest importer in the world.  In 2020, Pakistan imported $646 million (9% of global tea imports) worth of tea and exported $15.2 million in branded blends of tea such as Tapal Tea. Pakistan tea imports grew 19.8% from 2019 to 2020. 

Pakistan Tea Trade. Source: The Observatory of Economic Complexity

Other major tea importers in 2020 were as follows: United States: $473.8 million (7.1%) Russia: $412.2 million (6.2%) United Kingdom: $348.7 million (5.2%) Saudi Arabia: $243.6 million (3.7%) Iran: $236.3 million (3.5%) Hong Kong: $221.8 million (3.3%) Morocco: $202.3 million (3%) Egypt: $197.2 million (3%) Germany: $195 million (2.9%) China: $180 million (2.7%) France: $168.1 million (2.5%) United Arab Emirates: $164.9 million (2.5%) Japan: $156.6 million (2.4%) Iraq: $134.7 million (2%).  Global purchases of imported tea totaled US$6.7 billion in 2020. Of these countries, 4 markets for tea imports grew since 2019 namely: Hong Kong (up 19%), Pakistan (up 18.7%), Saudi Arabia (up 2.9%)  and France (up 0.7%).

Tea is popular in Pakistan and many other parts of the world for many reasons. A British study found that tea provides as much day-time stimulation as coffee, despite having half the caffeine. But tea was less likely to disrupt sleep. A Japanese study reported that plant compounds found in regular black tea – called theaflavins – were found to kill off oral bacteria linked with tooth and gum disease in a clinical trial with adults. A team of American scientists in Baltimore reviewed the evidence on tea and heart health, reporting that tea polyphenols have a direct impact on heart muscle contractions by controlling the flow of calcium ions into the muscle cells. The TAP (Tea Advisory Panel) data review reveals that more than half of Brits agree that tea is good for the heart.

World's Top Tea Importing Countries. Source: Statista

Last year, the PTI government headed by former Prime Minister Imran Khan decided to push domestic cultivation of tea in Pakistan with the help of Chinese experts. Already, trials have been conducted for growing tea in Mansehra, Battagram, Swat and Azad Kashmir regions which are considered to have the right climate for it. About 25,000 acres of government land has been allocated for tea cultivation along the China-Pakistan Economic Corridor (CPEC). 

“This year we are going to approve a project where we are growing tea on an area of 25,000 acres; we are creating history; we plan to complete the proposed tea plantations over the next five years,” said Special Assistant to Prime Minister on Food Security Jamshed Iqbal Cheema during his 2021 visit to the National Tea and High-Value Crops Research Institute (NTHRI) at Shinkiari, Mansehra in Khyber-Pakhtunkhwa province. Cheema said Pakistan has great potential for growing tea.  The country has 178,000 acres of tea cultivable land. “Pakistan can grow its own tea,” he said, adding that the country imported 30 million tonnes of tea each year from 15 different tea-producing countries.

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[Riaz Haq]

Islamabad [Pakistan], May 15 (ANI): Pakistan’s oil and eatable import bill surged by 58.98 per cent to USD 24.77 billion in the months of July and April even the country battles a fast declining economy, owing to an increase in international prices and a massive depreciation of the rupee.

https://theprint.in/world/pakistan-oil-eatable-import-bill-spiked-t...

When compared to last year’s import bill of USD 44.73 billion, the country’s overall import bill spiked by 46.51 per cent to USD 65.53 in ten months ending October 2022, reported the Dawn newspaper. The share of these products also faced an increase of 37.79 per cent. The sharp ascent in these two sectors has resulted in trade deficits in Pakistan, adding pressure on the government’s external side.

Further, data released by the Pakistan Bureau of Statistics revealed that the import bill on oil has increased by over 95.84 per cent to USD 17.03 billion in 10MFY22. Further, the import of petroleum products increased by 121.15 per cent in value and 24.17 per cent in quantity, crude oil imports witnessed a hike of 75.34pc in value and 1.36pc in quantity while there was a sharp rise of 39.86 per cent in the value of liquefied petroleum gas imports.

Reportedly, in order to close the gap in food production, the food import bill had a surge of over 12.30 per cent to USD 7.74 billion in 10MFY22, reported the Dawn newspaper. The import bill in Pakistan is likely to spike further in the following months as the Pakistan government has decided to import about 4 million tonnes of wheat and 0.6 million tonnes of sugar to build strategic reserves, reported the Dawn newspaper.

Meanwhile, there was also a steady increase in edible oil imports in terms of both value and quantity. The value of the palm oil import bill was also hiked by 44.64 per cent to USD 3.09 billion in ten months ending October 2022, up from USD 2.14 billion in 10MFY21. This in turn resulted in a domestic price surge in vegetable ghee and cooking oil.

Notably, the import of soybean oil ascended by 101.96 per cent in value and 9.30 per cent in quantity this year while wheat imports had a decline of 19.12 per cent to 2.206 million tonnes from 3.61 million tonnes in the previous year, reported the Dawn newspaper. Pakistan witnessed a zero wheat import in the month of April.

Also, in comparison to 280,377 tonnes of sugar imports in Pakistan last year, this year there was a hike of about 49.52 per cent to 311,851 tonnes of sugar import. There was also a rapid surge in the import bill of tea, spices, and pulses as well.

Meanwhile, according to a report released by the Global Report on Food Crises, Pakistan’s Balochistan, Khyber Pakhtunkhwa and Sindh provinces are suffering from acute food shortages. A hike in food and fuel prices, drought conditions, livestock diseases, and unemployment issues have contributed to the rise in national food rates.

Further, ahead of the delay in the revival of the International Monetary Fund (IMF) programme and falling foreign currency reserves, the Pakistani rupee hit an all-time low against the US Dollar, crippling the country’s economy further. (ANI)

[Riaz Haq]

Why is Pakistan’s government asking people to drink less tea?
The country is grappling with a debt crisis

https://www.economist.com/the-economist-explains/2022/06/21/why-is-...


On june 14th Ahsan Iqbal, Pakistan’s minister for planning and development, appealed to people “to cut down the consumption of tea by one to two cups” a day to help preserve the country’s dwindling foreign exchange reserves. Cries of “austeri-tea” soon made their way across social media. The average Pakistani sips at least three cups a day. So why is the Pakistan’s government asking them to drink less tea?

Pakistan imports some $600m of tea each year. But the government coffers hold less than $9bn in foreign reserves. That is a drop of more than 50% since August and barely enough to cover 45 days of imports of all goods. It owes some $129bn to foreign lenders. On June 21st representatives from the United Nations Development Programme met officials in Islamabad, Pakistan’s capital, to discuss the country’s economic crisis.

Food and fuel prices are rising across the world. In Pakistan annual inflation hit 13.8% in May, the highest in two-and-a-half years. But decades of economic mismanagement have triggered a string of balance-of-payment crises. The country has spent 22 of the past 30 years in some kind of International Monetary Fund (imf) programme. The pandemic and war in Ukraine have further battered the ailing economy. On June 21st the rupee hit a record low against the dollar. And the budget deficit is 8.6% of gdp, well above the government’s previous target of 7.1%. Recent political instability has not helped matters. Imran Khan, the former prime minister, was ousted in April and replaced by Shehbaz Sharif. Mr Khan has sought to destabilise the new government ever since.

Still, there are signs that Mr Sharif’s new government is restoring some order to the economy. On June 10th Miftah Ismail, the finance minister, presented a budget full of cost-saving measures. He increased the taxes on the banking sector by three percentage points and reduced the target for the budget deficit to 4.9% of gdp. He also promised to revoke fuel subsidies that cost the government $600m each month. On June 17th, the government increased fuel prices by 29%—the third increase in a month. Such moves will be painful but are aimed at coaxing the imf into disbursing the remaining half of a $6bn rescue package, without which Pakistan may default on its debt obligations.

But the imf is fed up with Pakistan’s long history of empty promises. Between 1996 and 1997 the government fiddled with the budget-deficit figures to reduce it by $2bn in order to secure a bailout from the fund. Citigroup, an American bank, predicts that the new budget announcements will not be enough to sway the fund.

The tea-based austerity is not the first time that the government has used a spoon to dig itself out of a hole. In 2018 officials were asked to replace meals with biscuits during meetings to cut costs. But difficult structural reforms, rather than cutting down on tea, will be necessary to save Pakistan’s economy from plunging deeper into crisis.

[Riaz Haq]

Indian state bets big on oil palm to cut $19 billion vegoil imports

https://www.reuters.com/world/india/indian-state-bets-big-oil-palm-...

Pullarao Daravathu and thousands of fellow farmers from Telangana in India's south are busy planting oil palms as their home state aims to add more area under the controversial crop within four years than the entire country has in decades.

Telangana is targeting 2 million additional acres under oil palm cultivation in the next four years, and is going to great lengths to achieve this goal - from building large dams and irrigation canals to importing millions of germinated sprouts.

Generous government subsidies and bumper profit potential compared to other crops are also encouraging farmers like Daravathu to shift to oil palms.

"Oil palm is giving more than 200,000 Indian rupees ($2,536) per acre return to farmers who planted the crop some years back. In rice, I am struggling to earn 40,000 rupees even after putting in lots of effort," said Daravathu, who was planting oil palm on his 5-acre farm at Sathupally, nearly 300 km (186 miles) east of Hyderabad, the state capital.

The recent rally in palm oil prices has more than doubled prices of fresh fruit bunches, which farmers sell to oil mills.

For years, price volatility, water scarcity and a gestation period of nearly four years limited oil palm plantation in India to less than 1 million acres, mostly in coastal Andhra Pradesh, the state that Telangana was carved out of in 2014.

But Telangana, which occupies an inland region on the Deccan Plateau, is now keen to emerge as India's main palm oil hub, with an area target that would place the state as the fifth largest oil palm grower globally – from a negligible base currently.

The drive could reduce India's mammoth vegetable oil imports, which cost the country a record $18.9 billion a year ago and widened the national trade deficit.

India fulfils two-thirds of its vegetable oil demand through imports of around 14 million tonnes annually, including around 8.5 million tonnes of palm oil.

The federal government is keen to increase palm oil output to slash those expensive imports, which lifted inflation this year to multi-year highs after top supplier Indonesia abruptly halted exports.

"In the next four years, most of the palm planting would be done, and after 7-8 years Telangana could be producing 4 million tonnes of palm oil," L Venkatram Reddy, director of Horticulture at the state government told Reuters

------


Companies operating in Telangana imported 12.5 million sprouts last year and made seedlings for around 200,000 acres this year, said an official with the state-run TS Oilfed, the country's biggest importer of germinated sprouts

The state is aiming to import 15 million sprouts this year - mainly sourced from Indonesia, Malaysia, Thailand and Costa Rica - and 50 million next year to achieve the target, he said.

But only handful of companies are supplying germinated sprouts.

"There is sudden surge in demand following a rally in palm oil prices. Companies are not able to supply as much we need this year," said Sougata Niyogi, a top official at Godrej Agrovet. "The supply situation would become more comfortable next year."

[Riaz Haq]

Palm Oil For Pakistan – A Burden Or Breather In-Depth Analysis Of Pakistan’s Edible Oil Industry

https://tdap.gov.pk/wp-content/uploads/2022/03/Palm-Oil-For-Pakista...

For the last five years, Pakistan's agro sector is under trade deficit with USD 2.2 billion being the highest low in 2020. The widened trade gap in 2020 was due to the imports of wheat and pulses and the sudden increase in palm oil prices globally. Palm oil is Pakistan's largest food import item with a 30 percent share in agro imports and the country’s second-biggest import after petroleum. The bulk imports are a consequence of Pakistan’s increasing per capita consumption of edible oil, and the inability to produce adequate quantities of edible oil domestically. The total local consumption of edible oil is 5 MMT, 30 percent of which is domestically-produced and 70 percent of edible oil demand is met through the import of refined palm oil. This demand-supply gap indicates a deeply rooted dependence of Pakistan on imported oilseeds and refined palm oil, which is susceptible to deepen due to yearly decline in local oilseed production. Although the government has launched oilseed production enhancement programs for rapeseeds, sunflowers, and olive oil, the harvest cycle will approximately take the next 7 years to complete. Amid rising demands of edible oil and stunted local production, palm oil is a natural and economic choice for Pakistan due to its affordability, accessibility, and availability. Pakistan imports 75 percent of palm oil products from Indonesia under the Preferential Trade Agreement, whereas it imports 25 percent of palm oil products from Malaysia under the Free Trade Agreement. Despite these agreements, Pakistan faces high export duties on crude palm oil and increasing prices of refined palm oil. Because of these concerns the import value of palm oil is increasing at 2 percent faster rate than the quantity imported annually. If this scenario prevails, Pakistan will import 4 million tons of palm oil by 2025 costing over USD3.5 billion. To control the predicted hike, it is mandatory to control the price and consumption of palm oil for Pakistan. Pakistan is capable of consuming 1.5 million tons of crude oil but only a thousand tons were imported in 2020. The crude will not only produce refined palm oil but will also produce palm fatty acid distillate (PFAD) and palm stearin which are major imports of Pakistan. The study examines the possibility of importing crude oil instead of refined palm oil and finds out how imports of crude palm oil can reduce burden from the economy of Pakistan and make it an opportunity to move towards self-sufficiency

[Riaz Haq]

The (Pakistan) government is working on a policy that will not only reduce dependence on imported palm oil but also facilitate and support farmers to grow oilseed crops, Minister for National Food Security and Research, Tariq Bashir Cheema, said on Tuesday.

https://www.dawn.com/news/1698469

At a press conference, Mr Cheema said the government has decided to take short- to long-term policy measures for the uplift of the agriculture sector, focusing on encouraging the farming community to bring more area under cultivation with the ultimate objective of achieving self-sufficiency in all the major crops and reducing the country’s import bill for certain agricultural products.

The country is currently spending $4.5 billion annually on the import of palm oil, and it is expected that the import bill for this commodity will increase to $6bn next year.

The minister said spending $1bn on the import of three million tonnes of wheat and $6bn on importing palm oil in a year is a big loss of foreign exchange, which is a matter of grave concern.

“The present government has revised the procurement targets for the procurement of wheat by the Punjab government and Passco, which have been achieved. In the wake of the Russia-Ukraine war and the pressure built on the countries of the Central Asian Republic on their exports, the government has attained sufficient wheat stock to avoid the imposition of any emergency,” he added.

The minister said that the support price for wheat, being the important staple food crop, will be announced well ahead of the rabi season so that farmers will be able to have their own production estimates while keeping in view the market trends.

As far as cotton is concerned, Mr Cheema said that Prime Minister Shahbaz Sharif has already formed a special committee headed by Shahid Khaqan Abbasi, to formulate a recommendation as to how to incentivise cotton growers so that the lost area under cotton cultivation should be revived.

The intervention price for cotton will be set keeping in view of the price in the international market so that cotton growers should not face any loss, he said.

As part of the long-term policy measure, the government has decided to solarise all the 1.2m tube wells that are run on electricity. Once solarised, the agricultural tube wells will be 100 per cent free of electricity.

The special committee has proposed that bank financing on easy instalments be offered to farmers, and in this regard, the government is currently negotiating with commercial banks, he said.

He said that all agricultural inputs have been made tax free, and while referring to the availability of tractors, he was of the view that farmers should get tractors from banks on lease financing, as in the case of leasing of vehicles. This will help eliminate the profit of middlemen.

The minister said that Pakistan and China will shortly sign an agreement on buffalo breed improvement.

[Riaz Haq]

Country has potential to meet 95% of tea demand
Researcher says tea plantation can be promoted through cooperative farming, subsidies

https://tribune.com.pk/story/2369372/country-has-potential-to-meet-...

MANSEHRA:
Pakistan has huge potential to become self-sufficient in the tea sector. If planted on an additional 2,000 hectares of land offered by the government and invested by private companies, it can meet 95% of the national demand, said Dr Abdul Waheed, Director of National Tea and High Value Crop Research Institute, Pakistan Agriculture Research Council (PARC) said in an interview with the China Economic Net (CEN).

“We have done much research in collaboration with China. The tea research institute was also built on the recommendation of Chinese researchers and was later renamed as National Tea and High Value Crop Research Institute,” he said and underlined the need to follow commercialisation.

Pakistan’s heavy reliance on import of tea calls for enhancing the local production capacity. During 2021, Pakistan imported 2,258,000 kg of black and green tea for $596 million.

In the first three quarters (July-March) of fiscal year 2021-22, tea imports recorded an increase of 11.95% as compared to the corresponding period of last year.

“We have 64,000 hectares of land suitable for tea plantation. But so far only less than 80 hectares are dedicated for tea plantation. We must use at least 2,000 to 10,000 hectares under public-private partnership in the first year,” he recommended.

“We should rely on our capacity of four million plants per annum, rather than import,” he told CEN.

“Tea plantation can be promoted through cooperative farming and government subsidies. Private farmers have their own land and need incentives from the government.”

Providing incentives like interest-free loans to growers during the gestation period is also a practice adopted by China.

[Riaz Haq]

Tea plantation to help Pakistan reduce import bill

https://www.nation.com.pk/06-Oct-2022/tea-plantation-to-help-pakist...


ISLAMABAD-Pakistan can reduce its import bill by exploiting its great potential for growing tea on a large scale, WealthPK reported.

Tea is one of the most important high-value cash crops. Despite its low cost, tea is the most popular beverage in Pakistan. The country has great potential for tea plantation on a large scale.

Abdul Waheed, Director of National Tea and High-Value Crops Research Institute Shinkiari, told WealthPK that the current rate of population growth showed that demand for tea would continue to increase over time, putting a strain on limited foreign exchange resources. He said that Pakistan’s total import bill for tea in the fiscal year 2022 was more than $590 million.

According to a recently-conducted survey, there is a huge potential for tea cultivation in Pakistan. It says that 158,000 acres of land in Khyber Pakhtunkwa and 4,000 acres in Azad Jammu and Kashmir are suitable for tea plantation, which can not only meet the local demand but can be also exported to other countries. Abdul Waheed said that more than 15 tonnes of locally produced and processed green tea was exported to Japan during the last three to four years.

Fakhar powers Pakistan to thrashing win over New Zealand in 2nd ODI
“Tea plants can be raised both from seed and cuttings. In Tea World, tea has initially been raised through seeds because of the economic ease with which its plantation is expanded,” said the director of the research centre. Many countries like China, India, and Sri Lanka, the world-known tea producers for centuries, still raise more than 75% of tea through seeds. Due to high population pressure coupled with the low economic condition, Pakistan presently needs to grow tea. The country also needs to increase the yield of all agricultural commodities.

“Historically speaking, nations of the world have always gained self-sufficiency in quantities first before becoming quality conscious. Thus, tea quantity in the shortest possible time can be economically obtained from tea seeds and not from cuttings,” Abdul Waheed told WealthPK. According to the Food and Agriculture Organisation of the United Nations, tea is one of the most important cash crops and plays a significant role in rural development, poverty reduction and food security in exporting and developing countries. It is a principal source of livelihood for millions of people.

[Riaz Haq]

Pakistan is the world’s largest tea importer, spending over $600 million on the commodity last year. Imports have recently dropped by a lack of forex reserves, which are currently sufficient for less than two weeks of imports. This small wallet has necessitated the need to generate funds or restrict their use, as the incumbent government did by imposing import curbs.

But it looks like there is no plan being developed to reduce reliance on food imports. Tea trail cultivation was successful in Khyber Pakhtunkhwa province, but its area could not be grown commercially. According to a survey, Pakistan has approximately 158.000 acres of potential tea-planting land. Tea can be grown on approximately 180,000 acres if the forest area is included.

Tea cultivation thrives in areas such as Mansehra, Batagram, and Malakand. There are also more areas up to Swat Valley and beyond.

https://propakistani.pk/2023/02/14/tea-import-costs-are-rising-and-...

[Riaz Haq]

Assessing Pakistan’s agriculture innovation system | Tropical Agriculture Platform (TAP) | FAO

https://www.fao.org/in-action/tropical-agriculture-platform/news/de...

A new FAO report presents the results of a 2022 assessment of the national agriculture innovation system in Pakistan, based on seven case studies covering product innovation, services innovation and digital transformation, respectively. For example, one product innovation case study described is the ‘Super Seeder’, a tractor-pulled machine used in the rice–wheat system to simultaneously slash rice stubble and sow wheat, thus reducing negative impacts of burning the rice stubble. The study was the first main activity of the TAP-AIS Pakistan project, one of nine similar country projects in Asia-Pacific, Africa and Latin America and the Caribbean, implemented by FAO Pakistan in collaboration with the Ministry of National Food Security and Research during 2022–2024. This report profiles the structure, capacity and enabling environment of Pakistan’s agriculture innovation system and identifies major challenges and constraints; several gaps in the innovation system are highlighted:

Innovation actors’ have limited ability to initiate collaboration and engage in networking with other stakeholders, for market formation and scaling of innovation.
Collaboration was not pursued at all stages of the innovation process, that is, from innovation development to innovation scaling.
A supply-driven approach tends to be used rather than a market-driven approach. This limited potential for scaling innovations.
The scope for market formation was limited, as most initiatives were limited to innovation development and pilot implementation.
The case studies had set budgets for the innovation initiative; implementation and scaling did not continue after the budget was spent. This restricted sustainable implementation of innovations.
The assessment advised TAP-AIS Pakistan in terms of needs and priorities for organizational capacity development and policy dialogue to strengthen the innovation system for low-cost agricultural machinery, the chosen thematic focus of the project.